Fraser and another v Canterbury Diocesan Board of Finance and others
Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Hope of Craighead, Lord Walker of Gestingthorpe and Lord Brown of Eaton-under-Heywood
School Sites Act 1841 — Reverter — Whether reverter arising when land ceasing to be used for purpose specified in trust deed — Whether necessary to show cesser of a statutory purpose — Appeal allowed
The first respondent was the trustee of land that had been donated to its predecessor in the 1800s. The land was to be used to found a school for the education of poor persons, as provided for by section 2 of the School Sites Act 1841. When the school closed and the site was sold, the appellants claimed to be entitled to the proceeds of sale, as being the assignees of the persons to whom, under the 1841 Act, ownership of the land would have reverted when it ceased to be used “for the purposes in this Act mentioned”. The right of reverter under the 1841 Act, which had been subject to a 12-year limitation period, had subsequently been replaced, in section 1(4) of the Reverter of Sites Act 1987, by the imposition of a trust for sale by which the trustees were obliged to hold the proceeds of sale for the benefit of those who would otherwise have been entitled to reverter. No limitation period applied to claims under section 1(4), but the right to bring such a claim did not apply to anyone whose claim to the property had been time-barred prior to the 1987 Act coming into force.
The first respondent maintained that, because the school had educated children outside of the class designated in the trust deed, the land had ceased to be used in accordance with the trust purposes, and reverter had occurred long before the school had closed. It argued that the appellants’ claim had therefore been time-barred before the 1987 Act came into force, so that they could not claim beneficial entitlement to the proceeds of sale. That contention was rejected at first instance but accepted on appeal.
School Sites Act 1841 — Reverter — Whether reverter arising when land ceasing to be used for purpose specified in trust deed — Whether necessary to show cesser of a statutory purpose — Appeal allowed
The first respondent was the trustee of land that had been donated to its predecessor in the 1800s. The land was to be used to found a school for the education of poor persons, as provided for by section 2 of the School Sites Act 1841. When the school closed and the site was sold, the appellants claimed to be entitled to the proceeds of sale, as being the assignees of the persons to whom, under the 1841 Act, ownership of the land would have reverted when it ceased to be used “for the purposes in this Act mentioned”. The right of reverter under the 1841 Act, which had been subject to a 12-year limitation period, had subsequently been replaced, in section 1(4) of the Reverter of Sites Act 1987, by the imposition of a trust for sale by which the trustees were obliged to hold the proceeds of sale for the benefit of those who would otherwise have been entitled to reverter. No limitation period applied to claims under section 1(4), but the right to bring such a claim did not apply to anyone whose claim to the property had been time-barred prior to the 1987 Act coming into force.
The first respondent maintained that, because the school had educated children outside of the class designated in the trust deed, the land had ceased to be used in accordance with the trust purposes, and reverter had occurred long before the school had closed. It argued that the appellants’ claim had therefore been time-barred before the 1987 Act came into force, so that they could not claim beneficial entitlement to the proceeds of sale. That contention was rejected at first instance but accepted on appeal.
On a further appeal, the issues were whether: (i) reverter under section 2 of the 1841 Act occurred only upon the land ceasing to be used for one of the three purposes set out in that Act, or, instead, upon the land ceasing to be used for the potentially much narrower purposes specified in the particular grant; and (ii) the relevant use had ceased in the instant case by a date that rendered the appellants’ claim time-barred.
Held: The appeal was allowed.
(1) The 1841 Act expressly provided that reverter occurred only where land ceased to be used “for the purposes in this Act mentioned”, and made no reference to the purposes of the grant. There had to be a cesser of a relevant statutory purpose, which was to be identified by looking at the terms of the grant; but the grant, even if relatively narrow and detailed, did not curtail the breadth and simplicity of the statutory purpose. Although the further restrictions on use in the trust deed could be enforced in the same way as those of any other charitable trust, their breach did not have the drastic consequence of reverter: Attorney-General v Shadwell [1910] 1 Ch 92 considered; Fraser v Canterbury Diocesan Board of Finance (No 1) [2001] Ch 669 and Habermehl v Attorney-General [1996] EGCS 148 overruled.
(2) The courts should take a broad and practical approach to the question of whether a school had ceased to be used for the purposes of the Act. The evidence in the instant case did not show that the school had ceased to be used for the statutory purpose of educating the poor. Although the school had admitted a number of children who could not be described as poor, many of those admitted undoubtedly were, and there was no evidence to suggest that any poor person seeking entry had been turned down. It was not possible to infer that the purpose of the school was no longer the education of poor persons. Nor did the evidence support a finding that the trustees of the school had acted in breach of trust.
Christopher Nugee QC and Caroline Furze (instructed by William Blakeney) appeared for the appellants; Christopher McCall and Vivian Chapman (instructed by Furley Page, of Canterbury) appeared for the respondents.
Sally Dobson, barrister
